Introducing Sasol Khanyisa

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As a company proudly rooted in our South African heritage, Sasol embraces transformation. We are committed to contributing meaningfully to sustainable transformation as we accelerate this journey across Sasol.

Broad-based black economic empowerment (B-BBEE) is a key enabler for economic transformation and inclusive growth, which is important for South Africa’s long-term sustainability. In line with our values, transformation is a strategic, business and social imperative.

Reflecting on our past experience has provided a light for the path ahead on our transformation journey. It requires collective strength and support as we take the next step towards our future.

“Khanyisa” is a word that means to illuminate. It is from this concept that we have drawn inspiration to define Sasol Khanyisa.

We have taken into account many of the larger B-BBEE transactions in South Africa and have designed Sasol Khanyisa to incorporate what are considered to be the most appropriate and best features.

Sasol Khanyisa will be submitted to shareholders for approval at the Sasol Limited AGM in November this year.

Sasol Khanyisa is ultimately intended to achieve an effective (direct and indirect) B-BBEE ownership of at least 25% in Sasol South Africa, currently a wholly-owned subsidiary of Sasol.

Sustainable and Lasting Transformation

This new structure offers sustainable and lasting transformation through the ownership of Sasol by black South Africans.

The eligible participants will comprise the following groups:

Sasol qualifying employees;

Eligible Inzalo employee participants

Black permanent employees

Existing Sasol Inzalo Public and Groups shareholders;

Existing black Sasol shareholders that trade on the empowerment segment of the JSE.

Community participants (indirect interest held through the Sasol Foundation) will also be part of the overall structure.

We believe transformation will fuel our company and our country, gearing it for growth and development on a global scale. For this reason, Sasol’s goal, through several initiatives, is to achieve at least a level 4 BEE certification by 2020.That is why we are redefining our empowerment landscape by adopting a multi-faceted approach, with components aimed at increasing skills development, participation in management control and ownership for black South Africans.

For Sasol Inzalo Public shareholders, some of the fundamental differences of the new Sasol Khanyisa ownership model are that most of the dividend streams from Sasol South Africa will be used to repay the funding cost; its success is therefore not dependent on Sasol Limited share price fluctuations.

To accelerate transformation in Sasol, the ownership model has been designed so that Sasol South Africa shares can be exchanged for Sasol BEE Ordinary (SOLBE1) shares, listed on the empowerment segment of the JSE at the end of the 10-year period when the funding has been repaid.

The JSE’s Empowerment Segment allows participants to buy and sell shares in a transparent and regulated environment, specially tailored to the unique requirements of BEE share schemes. This listing also increases liquidity for investors and allows shareholders to realise the value of their investments through a public trading platform.

Sasol Khanyisa will own an effective shareholding in Sasol South Africa, which is a subsidiary of Sasol Limited. Sasol South Africa is Sasol’s largest operating entity, and is currently valued at R73 billion.

The shares in Sasol South Africa, which Sasol Khanyisa Public will indirectly hold, currently worth approximately R320 per share, will be funded by Sasol;

This funding will be paid off using dividends declared by Sasol South Africa over the 10-year period; therefore, the majority of dividends declared will not be paid directly to participants; and

Once the funding is settled, the Sasol Khanyisa Public shares will be exchanged for Sasol BEE Ordinary shares (SOLBE1) shares listed on the empowerment segment of the JSE.

How will Sasol BEE Ordinary shareholders (SOLBE1) take part?

At the unwind of Sasol Inzalo, Sasol BEE Ordinary shareholders will have the opportunity to keep their shares in the empowerment segment of the JSE and participate in Sasol Khanyisa. They will be invited to participate in Sasol Khanyisa at no cost to them and will also receive additional shares that are immediately tradable.

Those that choose to remain within the empowerment segment of the JSE will receive one bonus Sasol BEE Ordinary Share (SOLBE1) for every four Sasol BEE Ordinary (SOLBE1) shares owned.

Those that choose to leave the empowerment segment of the JSE will automatically receive Sasol ordinary shares (SOL) equal to the number of their Sasol BEE Ordinary (SOLBE1) shares – 100 SOLBE1 shares will become 100 SOL shares – but they will not take part in Sasol Khanyisa and they will not receive any additional shares.

How will Sasol Inzalo Public and Sasol Inzalo Groups shareholders take part?

Qualifying shareholders in Sasol Inzalo Public and Sasol Inzalo Groups will be invited to participate in Sasol Khanyisa Public and will receive:

1 Sasol Khanyisa Public share for every Sasol Inzalo Public or Groups share held, at no cost, and

1 SOLBE1 share for every 10 Sasol Khanyisa Public shares that are immediately tradeable, at no cost.

As an example, if you own 100 Sasol Inzalo Public shares you will receive at no cost to you:

100 Sasol Khanyisa Public shares, funded by Sasol; and

a further 10 SOLBE1 shares, worth R3 300 based on a share price of R330 per share (value will depend on actual share price).

All SOLBE1 shares, issued at no cost to you, are tradeable from the date of issue.

We are committed to providing a platform for regular and meaningful engagement and communication with all shareholders.

We believe that Sasol Khanyisa will deliver long-term value and sustainable ownership of Sasol by black South Africans. We look forward to your support in accelerating Sasol’s transformation journey, as we seek to realise our vision as a company proudly rooted in our South African heritage.